Most major commodities traded lower overnight, iron ore slumping to 127.00 from 141.00 in the past few sessions putting enormous pressure on the Australian Dollar (AUD) . Price deteriorated to 0.6840 as risk conditions worsened and focus on the Fed raising rates continues to cause concerns. US Inflation is still running hot despite publishing down at 8.3% in April, this was higher than the predicted 8.1% but dropped from 8.5% the 41 year high published in March. Energy prices rose 31% vs 32% and fuel oil increased a massive 81% vs 70%. The US 10Y Bond yield is down at 2.83% from Monday’s 3.2% signalling possible Fed pain ahead. The safe haven greenback may be flavour of choice for a while yet. On the chart there looks to be nothing but air all the way to support at 0.6720. A retest of this area is a possible outcome over the next few trading sessions. Looking ahead we have US Retail Sales and Australian unemployment data to publish before Australian parliamentary elections start next weekend.
The current interbank midrate is: AUDUSD 0.6874
The interbank range this week has been: AUDUSD 0.6827- 0.7072